Tribune Publishing has struck a deal with its largest shareholder, Alden Global Capital, that adds the hedge fund’s co-founder, Randall Smith, to the newspaper company’s board, while extending an ownership standstill agreement until next year.
The addition of Smith as a director, approved at a special board meeting Wednesday, gives Alden three seats on the now seven-member board.
The standstill agreement keeps Alden’s stake capped at 33% until after Tribune Publishing’s next annual shareholder meeting, which can take place no later than June 15, 2021, Tribune Publishing spokesman Max Reinsdorf said.
The agreement will be filed with the Securities and Exchange Commission on Thursday, Reinsdorf said.
Alden representatives could not be reached for comment Wednesday.
Smith’s influence at Tribune Publishing has been felt since Alden bought former nonexecutive chairman Michael Ferro’s holdings in November, consulting with top executives during the course of this year, a source close to the situation said.
Smith, 77, made his fortune and built his reputation by investing in distressed companies, so-called vulture investing. Heath Freeman, 40, a Duke University graduate and the son of an investment banker who represented unions, joined Alden as president at its inception.
Launched in 2007, the New York-based hedge fund turned its focus to newspapers during the Great Recession, buying stakes in companies that had declared bankruptcy such as MediaNews, Philadelphia Media Network and Journal Register. It also had a stake in Tribune Co., the bankrupt former parent company of Tribune Publishing.
Alden now owns about 200 publications through an operating company known as MediaNews Group, formerly Digital First Media. Its larger newspapers include the Denver Post, San Jose Mercury News and the St. Paul Pioneer Press. It has a track record of sweeping layoffs at its newspaper properties.
Alden took a 32% stake in Tribune Publishing in November, but was restricted from buying additional shares through June 30.
In December, Alden added two representatives to Tribune Publishing’s board, expanding it to eight members as part of the standstill agreement. The two Alden directors were elected at the company’s annual meeting in May as the board reverted to six members.
In addition to the Chicago Tribune, Tribune Publishing also owns the Baltimore Sun; Hartford Courant; Orlando Sentinel; South Florida Sun Sentinel; New York Daily News; the Capital Gazette in Annapolis, Maryland; The Morning Call in Allentown, Pennsylvania; the Daily Press in Newport News, Virginia; and The Virginian-Pilot in Norfolk, Virginia.
Los Angeles Times owner Patrick Soon-Shiong, Tribune Publishing’s second-largest shareholder with a 24% stake of the company, also was bound by a standstill agreement through June 30. Soon-Shiong did not respond to a request for comment Wednesday.
